The Council of Mortgage Lenders (CML) has warned the government not to cut the safety net which has helped to keep mortgage arrears and possessions in check.

Despite pressures on government funding, the CML argues it is important to maintain support for borrowers in difficulty – and fill some of the existing holes in the safety net – to help contain mortgage arrears and possessions in the challenging times ahead.

On the eve of the comprehensive spending review, the lender body has made a series of recommendations in conjunction with the housing charity Shelter to minimise the number of cases of possession. The proposals include retaining the existing 13-week qualifying period and the current capital limit of £200,000 for people claiming support for mortgage interest (SMI), thereby helping to offset the damaging effects of the 40% cut earlier this month in the rate at which this benefit is paid to claimants.

The CML also wants the government to maintain current funding of free debt advice and retain the existing mortgage rescue scheme.

However, the CML also says there is a need to maintain a balance of responsibilities between borrowers, lenders and the government for resolving payment problems. Borrowers must accept that they have a commitment to seeking to resolve their financial problems, the CML says, while lenders continue to show extended forbearance to match this commitment (helped by low interest rates slowing the growth of arrears).

The CML says that home-ownership will not be sustainable for everyone, particularly those who stretched themselves in the period before 2007 and were then caught out by the downturn in the economy and tougher credit conditions.